Dalian iron ore falls for third day amid China steel output limits

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* Iron ore could drop further in coming months - CBA analyst

* BMI Research sees iron ore averaging at $50 in 2018, $48 in 2019

By Manolo Serapio Jr

MANILA, Nov 10 (Reuters) - Chinese iron ore futures drifted down for a third day in a row on Friday amid concerns that consumption of the steelmaking commodity in the world’s top user would be reduced as steel producers slash production over winter.

The mills across northern China, along with other industrial plants, had been ordered to curb output for four months from November to limit smog during the cold season.

“With the cuts to steel output and other industrial activity to last until mid-March, there is a good likelihood that iron ore prices could drift even lower in coming months,” Commonwealth Bank of Australia analyst Vivek Dhar said in a note.

The most-actively traded iron ore for January delivery on the Dalian Commodity Exchange was down 1.2 percent at 463.50 yuan ($70) a tonne by 0220 GMT.

Spot iron ore prices have fallen more than 10 percent from near $70 a tonne in late September.

Iron ore for delivery to China’s Qingdao port .IO62-CNO=MB stood at $62.32 a tonne on Wednesday, little changed from the previous day, according to Metal Bulletin.

Dhar said an increase in global iron ore supply may push prices below $60 a tonne by mid-2018.